As our best president famously warned — and as our worst president daily reminds us — you can fool some of the people all of the time. Indeed, Donald Trump has so mastered the art of the big lie that I doubt Democrats will be able to evict him from the White House by trying to fool all of the people any of the time. The better strategy will be to follow President Abraham Lincoln’s advice and example and offer honesty, integrity, dignity and civility. Binding up the nation’s wounds will require a candidate willing to level with the American people.
In that respect, the debate this week among 20 Democratic presidential candidates was something of a disappointment. To be sure, the two-night free-for-all offered moments of anger, passion and high drama and did a good job in identifying the serious contenders from the also-rans. And while there was no shortage of plans and proposals, the Democratic program that began to emerge contained far too many economic fairy tales.
Let’s begin with the candidates’ description of the economy, in which all but the richest are described as working two or three jobs, living paycheck to paycheck, drowning in college loans and afraid to take their kids to the emergency room. Yes, inequality is a problem and too many people are being left behind. But this is also an economy where unemployment is low, wages are rising, 17 million new cars were sold last year, and the reason the middle class is shrinking is that people are moving up as well as down. Bad diagnoses lead to bad prescriptions.
There’s no better example of this than proposals for tuition-free college and wiping out all student debt. Sen. Amy Klobuchar and Mayor Pete Buttigieg get credit for standing up to the progressive mob and pointing out how regressive it would be for lower-income Americans who do not have college degrees to help pay the tuitions of higher-income Americans who do. But the bigger reason more children don’t complete college isn’t the cost — it is that the K-12 public education system failed to prepare them, which is where the real focus should be. As a former Denver schools superintendent, Sen. Michael F. Bennet might have explained that if he had been given that opportunity. And as successful businessmen, Andrew Yang and John Delaney might have noted the folly of giving universities and colleges an invitation to increase their costs once the federal government agreed to pick up the tab.
Just because something ought to be a “right” does not mean it needs to be free — and that is as true for health care as it is for a college education. When something is free, people tend to consume too much of it. That is why a progressive tuition system with income-based repayment of student loans makes sense for higher education. And it is why a progressive and smartly designed system of deductibles and co-pays make sense for health insurance. There is no free lunch here: You can either have patient cost-sharing in an effort to reduce unnecessary care and reduce overall health spending, or you have higher premiums and taxes. Whether public or private, a smart health insurance plan is one that rewards people for living healthy lives while still providing care to those who get sick through no fault of their own.
The bigger problem with Medicare-for-all is that the only way it works economically is for the government to dictate prices for medical care that are significantly lower than they are now, at least for private insurance. Going that route, however, would not only lower the incomes of executives and profits of insurance and drug companies. It would also lower the incomes of most doctors, nurses and medical technicians, to the tune of hundreds of billions of dollars a year. It would force the closure of hundreds of underutilized and inefficient hospitals, along with underutilized and inefficient departments at the hospitals that remain. That would lead to a temporary loss of millions of jobs for the people who work at those facilities, in addition to those at the insurance companies and human resource departments in every company in America. Profits at hospitals, drug companies, medical-device makers, nursing homes and laboratories would almost surely be cut in half.
In the long run, all of that would probably be an economic plus for most Americans and give a competitive boost for the American economy. But in the short and medium run, it would involve a huge economic dislocation and a huge shift in income. Candidates pushing Medicare-for-all need to acknowledge those realities rather than peddling the fantasy that the patient experience will remain unchanged and that the only losers will be greedy drug companies and insurers.
And then there is the Green New Deal, with its promise of not only a saved planet but also millions of new jobs in a clean-energy industry. I’m a little confused about economic math here. As I understand it, once the investments in research and development have been made and all the right incentives are put in place, Americans will somehow be consuming less energy, producing it at a lower cost while at the same time generating more employment at higher wages. Sounds like voodoo economics to me.
Recall that Barack Obama and Hillary Clinton lost political credibility talking out of both sides of their mouths when it came to climate change, vowing to environmentalists that they would wage a war on coal while also denying to blue-collar workers that they were doing any such thing. As a matter of close approximation, every job created by making, installing and maintaining solar panels and windmills would be offset by a job lost in the oil, gas and coal industries. Some Democratic candidates are making the promise that American firms will dominate the world market and create millions of jobs by exporting our technology, but that’s a stretch. For one thing, the rest of the world isn’t exactly sitting around waiting for our excellence. Indeed, in some areas, the Chinese, the Japanese and the Europeans are well ahead of us, while in others, they are likely to practice the same kind of protectionism to help domestic suppliers, just as we do today.
The inconvenient truth is that industrial-sized solar panels and windmills are so expensive to schlep around that they are more likely to be produced, assembled and maintained close to where they are used. American engineers might lead the way someday in designing and engineering the next generation of clean-energy hardware and software, but this will be tens of thousands of jobs, not millions, and they will be jobs for highly educated workers, not high school graduates scraping mountaintops in Montana, refining oil in Houston or drilling for gas in Pennsylvania. And all that money spent to pay Americans to plant trees or improve soil conservation or sequester methane from cows and pigs is money that we are not spending to pay people to do something else.
No issue generated more outrage or more soaring rhetoric about our national values and character than immigration. As far as I could tell, the only candidate not willing to decriminalize crossing into the country illegally, or deporting those who do, was Bennet, who was never pressed on the point. If the other 19 candidates weren’t for open borders, they managed to give a pretty good imitation of politicians who were. And they seemed to have no trouble with the idea that there should be no limit to the number of refugees we should accept and provide with food, shelter, medical care, transportation and education for their children until they can find jobs and begin supporting themselves. While that may be the humane thing to do, it is not without a significant economic cost, at least for the first generation. And as Clinton and the leaders in England, France, Germany and Italy have discovered, the political costs are even higher.
What I missed most in this first debate was a more serious debate about American capitalism.
Former governor and brewpub entrepreneur John Hickenlooper, who earlier in the race embarrassed himself by refusing to call himself a capitalist, tried to make up for that gaffe by distancing himself from socialism — but only because of the political costs, not the economic ones.
Sen. Kirsten Gillibrand at one point took pains to differentiate the kind of healthy capitalism Democrats want from the greedy kind of capitalism epitomized by insurance and drug companies that puts profit over people. How she might do that was never explored.
Sen. Elizabeth Warren drew applause with her line that the only industrial policy in the United States was “to let giant corporations do whatever they want.” She reprised her call for breaking up tech giants, big banks and other monopolies, saying it is not a matter of passing new laws but simply having the courage to enforce the ones we already have. It was unfortunate that Klobuchar did not have the chance to set her straight and explain that it has been decades of rulings by conservative or timid judges that have hollowed out the antitrust enforcement, to the point that it will now take legislation to stop the megamergers and adapt the law to a high-tech economy prone to winner-take-all competition.
Since all of the Democrats seem to favor raising taxes on the wealthy and big corporations, the moderators at one point asked all the candidates to declare whether they would be willing to raise taxes on the middle class to help fund their ambitious agendas. I would have thought at least one of the candidates would have taken the opportunity to deliver an impassioned defense of government and its role in improving lives and creating an economy that is both prosperous and fair — in short, a government that middle-class people would be willing to pay a bit more for through higher taxes. None, however, was clever or courageous enough to do so. Instead, they all ducked the question.